YAKIMA, Wash.  The federal government will halt its quest to ship hazardous waste to the nation's most contaminated nuclear site until a new environmental review is done, the U.S. Energy Department announced Monday.

Washington state had sued to block the proposed shipments of nuclear and hazardous waste to the Hanford nuclear reservation on the banks of the Columbia River.

The state agreed to drop the lawsuit in exchange for another environmental study, which will re-analyze effects of waste storage on groundwater. The state will also play a greater role in developing the new statement.

The document is to be completed by 2008.

"With this agreement, both parties will be able to shift their focus and resources away from litigation and toward partnership and our shared cleanup goals," Energy Secretary Samuel Bodman said in a statement.

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State Attorney General Rob McKenna called the resolution "a great outcome for a long and contentious case."

The Energy Department manages cleanup at the 586-square-mile Hanford reservation, which is the most contaminated nuclear site in the nation after 40 years of plutonium production for the U.S. weapons arsenal. Cleanup costs are expected to total $50 billion to $60 billion, with the work to be completed by 2035.

Washington sued the Energy Department in 2003 to block shipments of off-site waste. The state expanded the lawsuit in 2004 to include a challenge of the environmental review, released that year.

A judge barred the shipments, and last year the Energy Department found that the current statement contained inconsistent data on groundwater.

In a separate case, the federal government is challenging the constitutionality of a voter-approved state initiative barring out-of-state waste shipments to Hanford.